- Long before the National Health Insurance Scheme (NHIS) made the headlines with the recent crisis surrounding its repeatedly suspended Executive Secretary, Usman Yusuf, the Auditor-General of the Federation (AuGF) raised an alarm on how monumental fraud, opacity, and impunity had become the culture of the agency, a PREMIUM TIMES report has disclosed.
The annual report of the AuGF on the accounts of Nigerian agencies for the year ended December 2016 revealed that billions of naira were unaccounted for by the management of the NHIS in the previous seven years.
The report, which is the latest by the AuGF, indicated that fraud and mismanagement as alleged against Mr Yusuf are standard practice at the agency and actually predate his administration.
Mr. Yusuf, 54, took over the state-run health insurance provider on July 29, 2016, but his tenure has been bedeviled by controversies. His reign partially came to a halt last year July when the Minister of Health, Isaac Adewole, sent him on indefinite suspension over allegations of misconduct and corruption.
Thereafter, Mr. Adewole asked a panel to investigate the allegations. Although documents in possession of PREMIUM TIMES revealed the panel indicted Mr. Yusuf and recommended a sanction, President Muhammadu Buhari reinstated him seven months later.
However, on October 18, the governing council of the scheme again announced it was sending the executive secretary on another indefinite suspension also over alleged fraud and misconduct. But he disputed the powers of the council to suspend him and alleged he was being victimized. The following Monday, he stormed the headquarters of the scheme with a contingent of about 50 police officers to force his way into his office.
President Buhari eventually intervened and directed Mr. Yusuf to proceed on administrative leave from November 5, to enable a panel he instructed to be constituted to investigate the allegations against him.
The federal government established the NHIS under Act 35 of the 1999 Constitution with a view to ensuring effective and affordable health care services to all Nigerians. However, since its take off 13 years ago, the scheme has failed to meaningfully cover or share the expenses associated with healthcare of Nigerians as envisaged.
The auditor general’s report showed the welter of financial misconduct and brazen disregard of fiscal regulations by the management of the scheme.
The report shows the scheme consistently failed to submit audited financial statements, in disregard of federal laws mandating an annual audit of public agencies.The report revealed that billions of naira were unaccounted for by the scheme in the previous seven years. It uncovered monumental financial irregularities, opaque transactions, as well as irregular and abnormal running costs during the period.
“In my Annual Report for the year ended 31st December 2015 (PART 1), I reported that NHIS had consistently failed to submit its Audited Accounts to me, for the 4 (four) years from 2011 to 2014, as required by Section 85(3) (b) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and Financial Regulation 3210(v),” the Auditor-General of the Federation, Anthony Ayine, stated in the report.
“The Executive Secretary was asked to submit 7 (seven) copies each of the Audited Accounts and Management Letter for every year of default. However, up until the time of compiling this report, the Accounts were still outstanding, as no remedial action had been taken by the NHIS Management in this regard. Instead, 2015, 2016 and 2017 Accounts have been added to the backlog.
“This development restricted me from commenting on the Audited account of the Scheme for the years in question,” Mr. Ayine stated.
The report shows that the purchase and renovation of the NHIS corporate Head Office, which costs about N990million were inflated.
The contracts for the building was also illegally awarded by the Ministerial Tenders Board instead of the Federal Executive Council.
“In the process of examining payment voucher no. NHIS/ADM/0002/2015 dated 12th January 2015, for the purchase and rehabilitation/renovation of property/uncompleted Building for NHIS Corporate Head Office, it was revealed that the purchase of the Building for N990,000,000.00 was awarded by the Ministerial Tenders Board.
“The contract amount is above the official limit of the Ministerial Tenders Board and should have been awarded by the Federal Executive Council. During a visit to the property, it was observed that the purchased property was only at foundation level, hence the cost of the property appeared inflated.”
The report also indicted the scheme of investing an additional N117 billion (N117,894,196,033.00) against the approval of the health minister.
“Between December 2014 and January 2015, the NHIS sought and obtained the approval of the Honourable Minister of Health to increase its investment fund portfolio from N115 billion to N123 billion.“However, in complete disregard of the approval, the Scheme invested the sum of N240,894,196,033.00 as against the N123 billion approved.
The Treasury Bill Account of N261 million (N261,780,821.92) on 1st of June 2015 was also debited instead of credited in the Bank Statement.
“Balance of N11 billion (N11,297,227,516.51) was not transferred to the TSA in compliance with Government directive as at September 2015 deadline. These irregularities made it difficult to establish the true position of the Fund of the Scheme and calls for reconciliation,” the auditor stated.
The audit report shows that N108 million (N108,825,756.00) was spent as donations in 2015. The basis for some of these donations, the auditor said, was not explained. He asked the executive secretary to justify the expenditure of such an amount on donations as well as disclose the purpose of the donations.
The report also stated that the scheme failed to maintain a fixed asset register to capture all the asset owned or acquired since 2012, resulting in unavailability of a comprehensive record of the asset. The auditor asked the executive secretary to ensure that “a comprehensive Fixed Assets Register is compiled forthwith, to capture all the Assets owned by the organization.”
The report further stated that schedule of cash advances for the scheme as at 31st December 2015, showed that unretired cash advances amounted to over N99 million (N99,619,560.00).
“These cash advances were granted for various official duties, but the age of the advances were not disclosed in the schedule,” it stated.
It also stated multiple advances were granted to staff without retiring the previous ones, “in flagrant violation of the Financial Regulations which provide that no new advance should be granted to any officer without retiring the previous one.”
The audit report also showed that over N38 million generated by the scheme as accreditation fees by Health Management Organisations (HMOs) and Tender fees from prospective contractors in the year 2015 were not remitted to the Consolidated Revenue Fund as stipulated by the Fiscal Responsibility Act.
Ironically, the auditor general’s report only added a layer to the allegations of corruption that have been swirling around the NHIS.
An Agency Steeped In Fraud
Mr. Yusuf only took over on July 29, 2016, from the then acting Executive Secretary, Olufemi Akingbade, who was the General Manager, Information Communication Technology (ICT) until he was appointed by President Goodluck Jonathan to head the NHIS following the sack of Olufemi Thomas.
Mr. Thomas was appointed Executive Secretary on November 20, 2013, and sacked on April 27, 2015, for reasons not specified. In August 2015, a few months after he was sacked, the Economic and Financial Crimes Commission (EFCC) was on his trail over a $2.198,900 cash seized from one Ibiteye Bamidele, a bureau de change operator arrested at the Lagos airport in July 2015.Mr. Bamidele had named Mr. Thomas as the owner of the cash seized by officials of the National Drug Law Enforcement Agency (NDLEA).
In 2017, Mr. Thomas and his successor in an acting capacity, Mr. Akingbade, were fingered as masterminds of fraud involving billions of naira, employment racketeering and a string of other misdeeds indicative of abuse of office during their time in office.
Mr. Akingbade was one of the eight officials of the NHIS suspended by the Minister of Health, Mr. Adewole, in July 2017 following more facts uncovered by the committee set up by the minister to investigate the allegations against Mr. Yusuf. Mr. Akingbade was accused of fraud while he was in charge of the ICT Department and was indicted by security agencies but was never charged.
According to a document obtained by SAHARA REPORTERS newspaper in 2017, Messrs Thomas and Akingbade were found to have sneaked non-existent HMOs into the NHIS and paid them a whopping N322.7million.
Mr. Thomas was also found to have sanctioned the purchase of a proposed site for the NHIS office complex at a vastly inflated sum of N900million, a cost in excess of the N500million prescribed in the 2014 budget.
He was also said to have awarded and started paying himself a package of N21million per annum, an action considered a breach of Sections 16 and 19 of the Act 2000.
Mr. Yusuf had acknowledged that the accounts of the NHIS were not audited over time, citing this as the reason why he engaged the services of an accounting firm, Sofura Professionals, to carry out a forensic review of the scheme’s accounting system.
The federal government also in 2018 said it discovered over N138 billion of the NHIS cash was trapped in 17 banks, financial companies, and individuals’ pockets from January 2011 to date and engaged a firm to carry out a forensic audit of the scheme.
Mr. Yusuf said he got to know the Attorney-General of the Federation (AGF) had engaged the firm, Aruna Bawa & Co, to carry out the audit and recovery of NHIS funds when he resumed from suspension in February. But he added that the assignment was a duplication of the earlier assignment he gave to Sofura Professionals and said he was trying to persuade the AGF to cancel it.
In his reaction, Mr. Akingbade, who was the acting executive secretary of the NHIS from 2015 to 2016, said only the present executive secretary can give answers to the questions raised by the auditor-general.
“The question about the information in the auditor’s report is an official question and should be channelled to the Executive Secretary. I am a civil servant and the amount of information I give out is limited. So if it comes through officially, all questions will be answered,” he said.
The spokesperson of the scheme, Odoh Onuh, could not be reached for comments as he did not pick calls to his line or respond to text messages.